World Bank Lends Kenya $750 million for Covid-19 Support

The World Bank has approved a $750 million loan to help Kenya recover from the effects of Covid-19 and budget support.

The Washington-based lender said the disbursement is part of World Bank’s Development Policy Operations (DPO), which lends cash for budget support instead of financing specific projects.

“The operation prioritizes reforms in hard-hit sectors, such as healthcare, education, and energy, which have been made urgent by the impacts of the COVID-19 crisis,” said World Bank Kenya Country Director Keith Hansen.

“In recognition of the severity of the crisis and need for a comprehensive response, we are supporting the government’s post-COVID-19 economic recovery strategy, which is designed to mitigate the adverse socio-economic effects of the pandemic and accelerate economic recovery and attain higher and sustained economic growth.”

The loan will attract an average interest rate of 3.1 per cent and has a 30 year repayment period preceded by a grace period of five years.

Kenya’s National Treasury on Thursday said “…a lot remains to be done in order to deal with the challenges of unemployment among our youth as well as high poverty and income inequality levels that have been aggravated by the COVID-19 Pandemic.”

The World Bank forecasts Kenya’s economy will grow 4.5 per cent in 2021 and 4.7 per cent in 2022.

This compared to Treasury’s projections of 6.6 per cent from 0.6 per cent in 2020.